Passionate about IP! Since June 2003 the IPKat weblog has covered copyright, patent, trade mark, info-tech and privacy/confidentiality issues from a mainly UK and European perspective. The team is David Brophy, Birgit Clark, Merpel, Jeremy Phillips, Eleonora Rosati, Darren Smyth, Annsley Merelle Ward and Neil J. Wilkof. You're welcome to read, post comments and participate in our community. You can email the Kats here

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Friday, 29 July 2011

Sooty didn't mind endorsing the
product, but he did object to being
paid in cigarettes ...

This Kat was wondering what has been happening in Australia, where plain packaging for tobacco products has been mooted as a means of discouraging smoking. He is indebted to his friend John Nobel (British Brands Group) for letting him have this helpful update on a topic which this blog has covered on two earlier occasions, here and here:

"On 6 July two Bills were tabled in Australia’s House of Representatives: the Tobacco Plain Packaging Billand the Trade Marks Amendment Bill. Coincidentally on the same day the UCL Law Faculty circulated a paper,“Implications of WTO law for plain packaging of tobacco products” (by Tania Voon and Andrew Mitchell) to those who hoped to attend the aborted event “'Tobacco or trademarks: Australia's plain packaging of cigarette products and the WTO”.

Closer to home ['home' is a relative term, but in this context it's Britain], the Department of Health is to launch a consultation by the end of this year on plain packaging, while the European Commission (DG Sanco), having already consulted on this subject last year, is due to publish its response early in 2012. The consultation is understood to have generated a substantial number of submissions covering IP. All this suggests the topic may be worth re-visiting for IPKat readers.

Whatever one’s view of tobacco products, these developments are of keen interest to those involved in brands and trade marks, raising questions on the lengths to which countries may go to regulate legal products but more particularly on the extent to which they can disrupt long-established, legitimate and immensely valuable trade marks.

The paper by Tania Voon and Andrew Mitchell addresses both the international trade and IP aspects of plain packaging, arguing that the proposal is consistent with TRIPS, the Technical Barriers to Trade (TBT) Agreement and GATT 1994, calling any challenge by tobacco companies under such agreements “a desperate last gasp” (having said that, Australia has notified its draft Bill to the WTO under the TBT agreement and a number of states have raised concernsover both the legality and the proportionality of the measure).

Leaving aside the trade arguments – which Voon and Mitchell dismiss and which are now the subject of a legal challenge by Philip Morris International (on the basis of Australia’s Bilateral Investment Treaty with Hong Kong) – it is the IP aspects which will be of particular interest and relevance to brand owners and IP practitioners.The Voon Mitchell paper sets out some of the IP areas where debate is likely to rage and it is worth looking in particular at two key ones:

(1)Would plain packaging deny the registration of trade marks or invalidate existing trade marks contrary to international agreements? This is addressed by TRIPS(Article 2 and 15.4) and the Paris Convention (Article 6 quinquies).Voon and Mitchell argue that these provisions are not relevant as trade mark rights are negative rights, in that they prevent others from doing something (this reflects TRIPS Article 16). Plain packaging proposals would prevent use, not deny registration or invalidate rights. Neither TRIPS nor the Paris Convention provides a right to trade mark owners to use their rights. Where a Member State requires proof of use in order to validate a trade mark (like the UK), a trade mark owner can prevent invalidation by demonstrating a valid obstacle to use, which a plain packaging regulation would be.

The counter arguments are that trade mark rights are a bundle of rights (not just a negative right to exclude others) and that registration and use are inherently linked. In addition, the right of the trade mark owner to exclude others from using the mark implies that the use of the mark is reserved to its owner. The right to a trade mark that cannot be used is not a right in any legal sense. In countries where an application for registration depends on existing use or an intention to use, registration would be effectively impossible. Further, in such countries that require evidence of use, there is a positive obligation to use. It is also worth noting that the Paris Convention and TRIPS provide protection against invalidation and plain packaging amounts to an invalidation.

(2)Would plain packaging represent an unjustifiable encumbrance on a trade mark and therefore contrary to TRIPS(Article 20 requires that “The use of a trademark in the course of trade shall not be unjustifiably encumbered by special requirements….”)?Voon and Mitchell acknowledge that plain packaging is a special requirement that may be considered an encumbrance but claim this is justifiable on health grounds. Article 20 should be read in conjunction with Article 7 (protection and enforcement of IPRs being conducive to social and economic welfare), Article 8 (Members may adopt measures necessary to protect public health) and the Doha Declaration which re-affirmed Members’ rights to protect public health. Further, were a Member State to claim that Australia was in violation of Article 20, it would be down to that Member State to prove it.

Controversy is likely to focus on whether plain packaging is justifiable. It is likely to be argued that an encumbrance can only be justified if it is necessary to protect public health. There is no convincing evidence that plain packaging will lead to a reduction in smoking, there are other less restrictive measures available and countries have reduced smoking without recourse to plain packaging. All this suggests that plain packaging is open to challenge whether the measure is justifiable, necessary and proportionate.

There must be some relief in UK and European government circles that it is Australia experimenting with such regulation. There seems plenty to argue that plain packaging would amount to a denial of registration, effective invalidation and an unjustifiable encumbrance on trade marks. Bearing in mind the value of the trade marks at stake, we can expect these arguments to be made formally and forcefully".

The IPKat thinks this is a very useful summary of the lines of argument which we are most likely to be hearing when the debate in Europe takes place. Merpel wonders whether the legal arguments will indeed be weighed and balanced or whether, this being the real world, the result will be based on the fact that people who oppose smoking lobby harder to wipe it out than people who support it fight to preserve it.

9 comments:

Christopher Morcom Q.C.
said...

This is a very helpful contribution to the debate on plain packaging for tobacco products. One aspect, however, which is not mentioned, is the possibility that similar legislation in the UK might be contrary to the Human Rights Convention, as incorporated into UK Law. The basis for the argument is that trade marks are rights of property, which are recognised under Article 1 of the First Protocol of the Convention. I wrote an article on this aspect in Trade Mark World (September 2008). There would need to be an overriding public interest to justify a denial of the right of proprietors of trade marks to exploit and protect their property rights. On the public interest aspect, there may be a countervailing consideration, in that plain packaging could make trade in counterfeit tobacco products easier. And, since some have sought to argue that plain packaging is necessary in order to discourage young people from taking up smoking, consideration might perhaps be given to a report (The Times, 29 July, page 3) that the number of young persons who smoke has significantly decreased in the past 10 years.

The tobacco companies are big enough, rich enough, and ugly enough, to fight their own battles. They do not need the assistance of IP blogs, or other apologists, to support their campaign by raising hypothetical fears of government interference with valuable brands relating to less contentious products. As if it is not bad enough that we down-under (non-smokers and smokers alike) have to be bombarded with offensive and frankly stupid advertising!

In Australia, it is already a ground of rejection, opposition and revocation, that the use of a trade mark would be contrary to law. We have heard no complaints that this provision is in breach of any international obligations, or is anything other than a perfectly legitimate exercise of sovereign power.

Nobody seems to be suggesting that it is a violation of any treaty obligations that Australia might, for example, deny registration of a trade mark in respect of, say, heroin, crack cocaine, or a monthly publication devoted to paedophilia. We hear no complaints from pharmaceutical companies about the fact that they are unable to exercise their trade mark 'rights' by advertising directly to end consumers, or that their products are largely kept from view behind pharmacy counters, or that pharmacists are obliged to offer customers a generic substitute (where available) when presented with a prescription for a name-brand product.

Big tobacco needs to suck it up (along with their toxic smoke) and accept that so long as they continue to market an increasingly unpopular product which has significant health consequences, they are likely to be subject to more stringent regulation as the balance shifts from their private commercial interests to the public interest in further reducing the consumption of an addictive and potentially deadly product.

It is also worth bearing in mind that in Australia we have an effective universal public healthcare system, so that the taxpayer largely foots the bill for treatment of smoking-related diseases. It is hardly, therefore, simply a question of allowing adults to 'make their own decisions'. Nobody is preventing anybody from making their own personal choices, just trying to discourage them (especially at younger ages) from making choices with substantial adverse personal and social consequences.

The IP rights issue is a sideshow, however it is one that the tobacco companies are happy to encourage. There is no general principle at stake here for us to defend. It is just self-interest.

As to Mr. Morcom’s point about plain packaging making counterfeiting easier, does he really think that it’s so much more difficult to forge a graphic trademark than a plain one? Or that the threat of a trademark infringement action is even on the radar screen for a commercial counterfeiter? Do bank robbers worry about parking tickets when they are driving stolen vehicles?

And as to his point that smoking amongst young people is deceasing, let’s hope that this is correct. The reasons, no doubt, rest in large measure on the fact that the various limitations imposed to date on tobacco companies’ advertising are finally beginning to work. QED.

There’s no real “debate” here. It’s simply an exercise in delay and dollars.

Big tobacco can spend endless millions of addicted smokers’ money causing confusion, obfuscation and litigation - the sole purpose being delay in the eventually inevitable imposition of plain packaging laws and ultimately the banning of their poisonous products. They know that they will rarely if ever win these battles and will eventually lose the wars - even in the developing world. But every day of delay is worth millions in revenues. So, they can buy lots of plainly dubious opinions and launch lots of plainly futile proceedings against plain packaging in order to play for time - and they can pay for all of this using their victims’ unstoppable flow of money.

TRIPs Article 8, which deals with public health and safety, is sufficient to answer the objections of the tobacco companies. Sure, they can register their trademarks. But that doesn’t give them the right to “use” them as they please.

Should SMITH AND WESSON be allowed to “use” its trademarks to advertise handguns on billboards across the street from schools? Or to sell such guns at corner convenience stores to teenagers? Or to give away free ammo at baseball games?

Should PFIZER be allowed to show graphic sexual acts in commercials on television as a way to “use” its trademark VIAGRA?

Let tobacco companies register all the trademarks they want. Let them even “use” word marks such as PHILLIP MORRIS on plain packaged cigarettes. The Oz bill appears to contain a neat little provision that “prevents the Registrar of Trade Marks from refusing to register or revoking the registration of a trade mark on the grounds that plain packaging requirements prevent the mark from being used or from distinguishing the relevant product” - See Voon & Mitchell paper, p. 6. This is probably unnecessary - but is rather clever and can’t hurt.

But let’s not pervert the purpose and the good name of IP law and even human rights law (really, Mr. Morcom!!!) to argue that tobacco companies have the “right” to use their trademarks at will promote products that have been conclusively proven to sicken and, ultimately, kill people.

To avoid counterfeits (which are certainly a serious health hazard in their own right), then perhaps we should not be thinking of plain white packaging, but rather a security-printed design (incorporating the same printing technologies as used on banknotes), but uniform across the entire tobacco market.

How is that harder to counterfeit than the existing package? It is only called 'plain' because it doesn't have the logo of the manufacturer - just the name in drag coloured text !

Is 'Christopher Morcom Q.C' above really going to claim that, in his professional opinion, the package label above offers less protection against counterfeiting than a more traditional package like this:

http://www.tobacco.net.au/images/P/Winfield%20Blue%2050G-01.JPG

Was the 'counterfeiting' argument made in ignorance or malice? I can imagine the response - it wasn't an argument that he was making .. merely saying that it is argument that MIGHT be made.

I have several questions. Why is the tobacco industry allowed to sell a product that KILLS over 6 million people a year world wide and not required to list even ONE of their toxic ingredients on their packaging, let alone show the consequences with graphic pictures of their sick and dead victims?

Ingredients including: arsenic (rat poison), hydrogen cyanide (used in gas chambers to kill people during the war), formaldehyde, polonium 210 (radioactive), cadmium (battery acid), benzene, acetone, ammonium hydroxide (toilet bowl cleaner), and nicotine (toxic AND one of the most addictive substances on the planet), among 4,000 to 8,000 chemicals, 619 additives and over 63 known cancer causing carcinogens for which the Surgeon General has stated, "THERE IS NO SAFE LEVEL OF EXPOSURE TO TOBACCO SMOKE".

Is it too much to ask that a picture of my deceased friends, family, and all the people worldwide who died of tobacco related diseases or fires be placed on each and every packet of cigarettes??? Surely their deaths are not in vain?

Your article confirms that you are just another whore for the tobacco industry.

Sincerely,

Another tobacco victim who never chose to be near toxic tobacco smoke, but who is permanently damaged from being married to a smoker and from working in smoke-filled clubs for years.

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